The global economy depends on trading. Every country of the world does trade in different ways. Even the slightest transaction of funds for some product, commodity and service is among trading. Now, with the evolution of time, people are moving on to various other dynamics of trades that can offer them huge profits in quick time.
Cryptocurrency ethereum is one of the options that people are contemplating and investing for great returns.
Ethereum is the second largest cryptocurrency globally, next only to the pioneering digital coin bitcoin. So, investors invest in it for quick benefits and gains. The following article lists out methods and tips to trade ethereum.
What is ethereum?
Ethereum is precisely a blockchain platform that also has its own cryptocurrency known ast Ether (ETH). Moreover, it also has an internal programming language called Solidity.
It is a public ledger which is decentralised used for recording and verifying transactions. Through the blockchain network, users’ can create, monetise, use applications, and publish on the platform. Moreover, its cryptocurrency is available to the world for making payments. Interestingly, insiders address it as dApps (decentralized applications on the network).
The total market cap of ethereum until 12 November 2021 was $558,266,003,176. The numbers are huge and mesmerising for investors and traders alike.
Ethereum is also an open source blockchain platform that also shares and creates business, entertainment applications and financial services.
Ethereum users have to pay fees called gas for using dApps. Notably, it may vary depending on the computational power required.
Understand ethereum
The motive of creating ethereum was to accord developers to publish and build distributed applications and smart contracts. It prevents any risk of downtime. Thus one of the biggest advantages for ethereum buyers and sellers. The utility of this digital coin is immense. Hence, its price has swung massively ever since its launch in July 2015.
Interestingly, it launched after several cryptocurrencies were already in the market. However, the service and blockchain service it rendered, traders found it useful and got attracted toward it.
Notably, ether cryptocurrency is safe from censorship, theft and fraud. So, traders have a lot of trust in it. So, it gives another reason for traders to trade and investors to invest.
The founders of ethereum include a group of tech enthusiasts, including Vitalik Buterin, and Joe Lubin. The concept was created by the former and he’s currently the public face and CEO, Moreover, he’s also called as the youngest crypto billionaire. He was born in 1994.
Meanwhile, the prime purpose of ethereum cryptocurrency was to serve within the purview of the ethereum network. However, it is now accepted by several merchants, industries and companies globally. Thus, people can make quick payments using it across several sectors.
Renowned companies and online websites like CheapAir, OverStock and Shopify
According to gartner Research, the primary competitors of ethereum in business that invest in blockchain technology and software platform include NEO, JP Morgan, Blockstream, IBM, IOTA, bitcoin, ripple, and Microsoft.
COVID-19 changed dynamics
The coronavirus pandemic during 2020 and 2021 changed the dynamics of cryptocurrency markets. Global traders and investors started recognising it as the real force that can draw money without having a regular job.
The price of ethereum in May 2020 was USD 133.76 and as of November 12, 2021, the price has magnified exponentially and has reached USD 4708.08. Now, that’s a massive difference. People who trusted their gut and ability to trade ethereum during those unprecedented times have become millionaires and billionaires with a reasonable investment.
Many people joined the bandwagon to trade ethereum and accumulated profits. With so many folks joining during the financial crisis inflicted upon by the virus, how to trade ethereum became one of the common searches on Google.
Ethereum price movement
Before you contemplate investing in cryptocurrency, know what effects ethereum price movement and how you can benefit from it. If you look closely, unlike other financial markets and instruments like commodities, forex, indices and stocks; cryptocurrency market is quite different.
It does not have any impact on political decisions and financial crises. It can brave through some of the toughest times and still get people to invest in it.
Factors like inflation and environmental concerns due to non-renewable resources are detrimental for fiat or traditional currencies. However, they do not pose any threat to cryptocurrencies like ethereum. Their traders know the stature and transparency.
There are a host of dynamics that are unique and new crypto traders should know about them before applying their capital.
Availability cause
If you are genuinely thinking of taking a plunge in ethereum, know about its availability. However, the number of volumes it trades is more than bitcoin. But overall, the number of its availability has no cap unlike bitcoin. Units of ether are added and lost over time. That’s one of the reasons it fluctuates and volatility remains in the market.
Interestingly, when crypto coins fluctuate indecisively, they create a massive opportunity for traders to trade in them and earn quick bucks. So, it is an open place where anyone can enter the market through a broker like TradedWell or Capixal or InvestBy. You have to choose anyone and start trade ethereum.
So, there is no dearth of availability, which helps traders bestow their trust on and trade with a free mind.
Market manipulation
Like every cryptocurrency, ethereum is also free from all regulations and government interferences. Thus, the power of manipulation lies in the hands of traders. They can invest a massive chunk of money and take a good amount of ethereum coins. That can give air to the trend to move to the greener side.
So, common traders can feel empowered. Meanwhile, in other markets like stocks and forex, one government policy or decision by a super power country can decide the future of several investors. So, in that sense, the risk factor is lesser when you trade ethereum despite no regulations.
Here, buying and selling in significant quantities can decide the market.
Media perception
It makes a significant difference when you read positive and negative news regarding cryptocurrencies. The widespread hold of social media and journalistic media can stir thoughts of various investors that can work as a catalyst. Based on news, people can decide to withdraw their funds from the market or infuse more capital.
So, a simple rumour can change the course of the market. People’s sentiments can offer bull or bear runs to ethereum. That emotional quotient is offered mostly by media houses.
For example, if news regarding security hacks comes up, it will create panic among traders and they would do bulk selling, causing the market to crash insignificantly.
So, ether’s value can change either way in quick succession. As a trader, always be wary of such situations. Keep reading from wherever you can that will let you decide whether you should trade ethereum or not at that time.
Broader acceptance
The price of ethereum is directly proportional to its acceptance in different markets and sectors in forms of payments and transactions. So, more people are convinced to put their capital into it which can exalt the price of ethereum. So, when you make your investment, check how traders are accepting it globally.
Notably, a number of investors and traders are growing magnificently and buying ether out of curiosity and profits. Looking at the past experience,
Technological sojourns
Ethereum is undoubtedly a unicorn of cryptocurrency that is way ahead of its competitors because it has its own blockchain technology. Moreover, several other cryptocurrencies use its blockchain for channelising in the market. Thus, performance of ethereum also impacts other crypto coins in the market. Its integration with crowdfunding
Also, youngsters do not affirm traditional systems, as there may be several loopholes in them. So, that’s the advantage that ethereum carries with itself. Also, several companies have begun to accept its technological advancements. So, that’s something impressive. Hence, one of the factors that influences market movement.
Government regulation
The only regulation governments of different countries can do is limit or restrict transactions of ethereum. For example, China has banned all transactions of cryptocurrencies and officially announced it as a criminal offence. Thus, anyone caught trading in ethereum is punishable by law.
When the official announcement was made, the cryptocurrency market crashed as it panicked traders. They started withdrawing money from the market.
Some governments are still processing and adapting ethereum. Also, several guidelines and supervision mechanisms can also make some difference while people think of investing in ethereum.
Steps to trade ethereum
Trading in ethereum requires some basic knowledge regarding the cryptocurrency market. Even if you’ve been a trader earlier, it is essential for you to know that the concept of cryptocurrencies is different from other trading.
Research about ethereum
The most important lesson about trading ethereum is researching it before investing your capital in it. Study deeply and learn how trading works in cryptocurrencies and what all criterias you need to know. Do not rush and take your time and understand all nuances of trading. Once you are ready, hunt for a better broker.
Search for broker
When you trade ethereum, you need a broker or an exchange which is worth your trust and provides great services that elevate your trading abilities. Searching them may require you to skim through various websites, reviews and experiences. Brokers like PrimeFin. TradedWell, ABinvesting, InvestBy, etc. can be of some help if you are looking to trade ethereum for a long term.
Develop a plan
Once you’ve got your broker, now getting a strategy or plan before trading is extremely pivotal. You cannot go to the market randomly. You’ll have to hatch a planning that can assist you with top gains.
But before you create a strategy, keep your emotions in check or weed them out, otherwise that can harm. You’ve got to take a practical approach while trading. Moreover, being an observer to ethereum is one of the skills that you need to deploy while trading. You’ll get immense help and will be able to track the market conveniently.
Here’re some ways you can follow to make a plan:-
- Set daily, monthly and yearly targets. You should know what you want to achieve during those periods.
- You have to decide which market can help you achieve your goals. Deep dive analysis can let you know about it.
- Check your pockets, how much capital you can risk. Based on that, make an investment in the financial market. Every trade will be different from the other. So, decide on a level of different perspectives that can help you achieve your goals.
- You must use every piece of information gathered by you during the course and use that to your advantage. Also, check the risk-reward ratio.
Place a bid
Once you’re sure about your strategies and know about all consequences, it is time to place a bid and trade in the cryptocurrency market. Start by putting in a little money and check how it goes. When your sample bidding is right on the money, you can attempt trading with additional funds.
Account opening process to trade ethereum
The process of account opening is simple for many brokers.
- Provide important information, like email address, phone number and others
- Verify your documents
- After verification, make the payment in the account
- Start trading
Conclusion:
How to trade ethereum has been one of the most searched phrases on search engine Google. The reason is simple, that it offers several reasons to earn money. So, traders are migrating towards it from the conventional ways of trading. Also, it offers quick money to investors.
So, no one wants to miss that chance. Brokers like PrimeFin, ROinvesting, HFTrading and others are offering opportunities to trade with ethereum.
Trading with ethereum may require you some strategies in place.
